Quishenberry v. UnitedHealthcare, Inc.
Decision Date | 21 September 2021 |
Docket Number | B303451 |
Parties | LARRY QUISHENBERRY, Plaintiff and Appellant, v. UNITEDHEALTHCARE, INC. et al., Defendants and Respondents. |
Court | California Court of Appeals Court of Appeals |
NOT TO BE PUBLISHED
APPEAL from judgments of the Superior Court No. BC631077 of Los Angeles County, Ralph Hofer, Judge. Affirmed.
Balisok & Associates and Russell S. Balisok for Plaintiff and Appellant.
Walraven & Westerfeld, Bryan S. Westerfeld and Jessica B Hardy for Defendants and Respondents UnitedHealthcare, Inc. UnitedHealth Group Incorporated, UnitedHealthcare Services, Inc., and UHC of California.
Carroll, Kelly, Trotter & Franzen, Michael J. Trotter, Brenda M. Ligorsky, and David P. Pruett for Defendants and Respondents Health Care Partners Medical Group and Healthcare Partners LLC.
Larry Quishenberry appeals from judgments of dismissal entered after the trial court sustained the demurrers of defendants UnitedHealthcare, Inc., UnitedHealth Group Incorporated, UnitedHealthcare Services, Inc., and UHC of California (collectively, the UnitedHealthcare entities) and Health Care Partners Medical Group and Healthcare Partners LLC (collectively, Healthcare Partners) without leave to amend. Quishenberry alleged his father, Eugene Quishenberry, [1] was prematurely discharged from a skilled nursing facility operated by GEM HealthCare, LLC (GEM), and Eugene died after his health deteriorated. Quishenberry sued GEM; Dr. Jae H. Lee, the doctor who provided Eugene's care at the GEM facility; the UnitedHealthcare entities, which provided a Medicare Advantage (MA) Health Maintenance Organization plan to Eugene; and Healthcare Partners, which provided physician services to Eugene, including the services of Dr. Lee. Quishenberry asserted causes of action for negligence, elder abuse, bad faith, and wrongful death.[2]
On appeal, Quishenberry contends the trial court erred in ruling the Medicare Part C preemption clause (42 U.S.C. §1395w-26(b)(3)) barred his causes of action. Quishenberry also challenges the trial court's determination Health & Safety Code section 1371.25 barred his claims against the UnitedHealthcare entities because the claims were based on the UnitedHealthcare entities' vicarious liability for the acts of GEM and Dr. Lee. Because Quishenberry's claims are preempted, we affirm.
Quishenberry filed this action on August 19, 2016 individually and as a successor in interest to Eugene. After the trial court sustained demurrers to the first amended complaint Quishenberry filed a second amended complaint (complaint) alleging claims for negligence, elder abuse, bad faith, [3] and wrongful death. The complaint alleged Eugene, who was born on October 12, 1929, was enrolled in an MA plan offered by one or more of the UnitedHealthcare entities.[4] The relationships among the UnitedHealthcare entities were “complex and not fully known or understood by” Quishenberry. The complaint alleged the UnitedHealthcare entities delegated to HealthCare Partners their responsibility to provide certain health care benefits (physician services) and administrative protections owed to MA plan enrollees by contracting with Healthcare Partners to provide physician services for the plan's enrollees. The UnitedHealthcare entities delegated to GEM, [5] which operated a skilled nursing facility in Pasadena, their responsibility to provide custodial care and administrative protections to plan enrollees.
In approximately November 2014, then-85-year-old Eugene broke his hip and was hospitalized at Huntington Hospital, which had a contract with the UnitedHealthcare entities to provide hospital services for enrollees. Eugene was later transferred to GEM's skilled nursing facility under the care of Dr. Lee, a medical doctor allegedly employed by Healthcare Partners. The complaint alleged that during Eugene's stay at GEM's skilled nursing facility, he developed severe pressure sores on his feet because of GEM's neglect. Neither Dr. Lee or GEM's nursing staff properly treated the sores, which made it difficult and painful for Eugene to walk without assistance.
Eugene was at GEM's skilled nursing facility for 24 days, from November 4 through 28, 2014. According to the complaint, Eugene was entitled under Medicare to an additional 76 days of care at GEM's skilled nursing facility with daily physical therapy and care for his pressure sores. [6]
The complaint alleged as to the negligence cause of action, “Despite the said knowledge that GEM was not providing necessary skilled nursing care to its resident-patients..., the [UnitedHealthcare] entities, GEM and [Healthcare Partners] acquiesced to, encouraged, directed, aided and abetted [Dr.] Lee's action to discharge Eugene under circumstances where acceptable medical practice and Medicare rules required that Eugene remain at GEM for more intense attention to his health care needs.” Further, the UnitedHealthcare entities, Healthcare Partners, and Dr. Lee acted recklessly and willfully because they “knew or should have known that they created the peril that enrollee patients including Eugene would be at risk of injury” and “consciously disregarded the peril and the probability of injury to resident-patients, including Eugene.”
The complaint alleged a separate negligence cause of action against the UnitedHealthcare entities and Healthcare Partners based on the special relationship doctrine. The complaint asserted Dr. Lee was an agent of Healthcare Partners, and both Healthcare Partners and GEM were agents of the UnitedHealthcare entities. The complaint alleged, The complaint added, “[Healthcare Partners] and the United Healthcare entities were motivated by their need to increase profit by reducing the cost of providing care to enrollees including Eugene in a skilled nursing facility setting.”
For the elder abuse cause of action, the complaint alleged all defendants “had responsibility for the custodial care and custodial treatment of Eugene” because of their agreement with the Center for Medicare and Medicaid Services (CMS).[7] The complaint alleged Healthcare Partners and the UnitedHealthcare entities “were and are legally responsible for the physical care and custody of enrollees including Eugene under Welfare & Institutions Code section 15610.57.”
Finally, the complaint asserted a wrongful death cause of action against all defendants for Quishenberry's loss of consortium.
On April 19, 2019 the UnitedHealthcare entities demurred to the second amended complaint. They argued Quishenberry's state law claims were preempted by the Medicare Act's preemption clause (42 U.S.C. § 1395w-26(b)(3); Medicare Part C preemption clause). Further, Quishenberry's claims were based on vicarious liability for the acts of GEM and Dr. Lee, and thus the claims were barred under section 1371.25 of the Knox-Keene Health Care Service Plan Act of 1975 (Health & Saf. Code, § 1340 et seq.; Knox-Keene Act). The UnitedHealthcare entities asserted Health & Safety Code section 1371.25 was not preempted by the Medicare Act, and if it was, Quishenberry's claims would also be preempted. In addition, Quishenberry failed to state viable claims for elder abuse and wrongful death.
Healthcare Partners and Dr. Lee also demurred, likewise asserting the Medicare Act preempted Quishenberry's claims. In addition, they asserted Quishenberry failed to exhaust his administrative remedies available under the Medicare Act before seeking judicial review. They also contended Quishenberry's claims for negligence and elder abuse were disguised challenges to the financial arrangements among the defendants, which were authorized under the Knox-Keene Act. Moreover, Dr. Lee could not be held liable for elder abuse because he was not in a custodial or caretaking relationship with Eugene.
After a hearing, on October 25, 2019 the trial court sustained the demurrers filed by the UnitedHealthcare entities and Healthcare Partners without leave to amend, but overruled Dr Lee's demurrer. Relying on Roberts v. United Healthcare Services, Inc. (2016) 2 Cal.App.5th 132 (Roberts), the court found Quishenberry's causes of action against the UnitedHealthcare entities and Healthcare Partners were preempted by the Medicare Act because the allegations involved defendants' “failure to administer properly the health care plan.” In addition, the claims against the UnitedHealthcare...
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